REGINA, Sask. — United States President Donald Trump threatens Canadian sovereignty at an Arizona rally as the White House finalizes a 35 per cent tariff on softwood lumber. We look at fresh warnings from Alberta Premier Danielle Smith that the dispute could drag on well into next year, and hear from prairie agricultural processors Terry Tyson, Mike Popowich and Ross Guenther on how businesses are coping with frozen investments and shifting supply chains.
Podcasts are available now on GX94, Yorkton, or on 620 CKRM, Regina, hosted by Steven Wilson. Or read the transcript below:
Steven Wilson — Welcome to Trade Dispute: Impact on the Prairies. I'm Steven Wilson. United States President Donald Trump has again taken direct aim at Canadian sovereignty, telling a campaign rally in Arizona that Canada is destined to become the 51st state.
Speaking to a crowd in Bullhead, Trump claimed that annexation is the only way the cross-border relationship can work, warning that America's plate is getting larger all the time. The fiery rhetoric came as the United States finalized a crushing new 35 per cent tariff on Canadian softwood lumber, a trade barrier economists warn will hammer Canadian forestry mills while driving up the cost of American home building.
In Washington, senior officials are ramping up their political attacks.
United States Commerce Secretary Howard Lutnick accused Prime Minister Mark Carney of deliberately blowing up trade talks to score political points ahead of upcoming provincial elections.
Meanwhile, United States Ambassador to Canada Pete Hoekstra issued a blunt warning to Ottawa ahead of next month's American midterms, telling the federal government to keep its nose out of the vote.
The escalating diplomatic chill prompted Ottawa to issue a new travel advisory yesterday, warning Canadians to expect heightened scrutiny at border crossings and a heightened risk of detention if denied entry.
Back home, Prairie leaders are urging businesses to brace for a protracted fight. Speaking to audiences yesterday, Alberta Premier Danielle Smith cautioned that no one should expect a resolution anytime soon, warning the standoff could easily last another eight to nine months. That prolonged uncertainty is hitting the border city of Lloydminster especially hard as residents find themselves caught between Alberta's Oct. 19 Independence referendum and the broader international trade turmoil threatening the region.
While TD Economics notes higher crude prices driven by Middle East tensions remain a net positive for Canadian oil revenues, the rest of the Prairie economy is feeling the squeeze.
A new mid-year report from Farm Credit Canada warns that while food and beverage manufacturing sales look higher on paper, volumes are flat with growth driven entirely by inflation. The report urges companies to aggressively pursue market diversification and tear down inter-provincial trade barriers to survive.
For agricultural processors, long-term planning is grinding to a halt. Terry Tyson is the president of Grain Millers in Yorkton. He says the unpredictability is actively freezing capital investments across the Prairies.
Terry Tyson — And then as regards to planning longer term, what this does, what this uncertainty does is really, it hinders you a little bit like in terms of planning for growth or investment. It's, I mean, the impact is often that you kind of pull back. We're still doing, we're still investing here in Yorkton.
We're doing a couple of capital projects right now to sort of diversify our business a bit more into, you know, further value-add and that kind of thing. But, you know, kind of the, let's say the five-year planning horizon becomes a lot more puzzling as far as capital investment and growth and that kind of thing. Until you can kind of take the uncertainty out of this, that's going to remain true. And I think that has a negative impact on investment.
Steven Wilson — That legal and financial exposure is also forcing local processors to rewrite their business relationships. Mike Popowich owns TA Foods in Yorkton. He says navigating customer contracts without clear trade rules has created unprecedented tension.
Mike Popowich — I think that's probably affected our business and our industry more than anything at this stage is the indecision and uncertainty that comes from both our side and my customers. Nobody knows if, you know, a month from now or in six months from now, or I mean, over the last 18 months, the whole time, that same feeling, if there's going to be additional tariffs or not. So it's certainly become a focus between us and our customers on making sure we understand the contracts are written and who would be responsible for those tariffs and, you know, what would happen if something did come on, which is honestly something we haven't worried about in the history of the company.
Steven Wilson — Despite the headwinds, Prairie entrepreneurs are working overtime to turn trade barriers into domestic opportunities. Ross Guenther is the president of Northern Nutrients in Saskatoon. He says Prairie businesses have no choice but to push through the storm.
Ross Guenther — No, definitely not the ideal market conditions to walk into with a large expansion, but, you know, sometimes there's the old proverb that crisis and opportunity can be the same thing. So it's about how you handle those trade winds that are, you know, really blocking you and how you can actually come up with solutions to them. So that's what we work at every single day to try to find the best way to move forward in this tough environment.
Steven Wilson — The struggles in Saskatchewan, Alberta and Manitoba are finding an echo south of the border. In North Dakota, congressional candidates spent much of a debate last night focusing on the plight of local farmers who are suffering under fractured export links to Canada. With both sides of the border bracing for a prolonged battle, we will continue tracking the economic fallout across the prairies.
I'm Steven Wilson. Thank you for listening to Trade Dispute: Impact on the Prairies.
Listen weekdays @9 am to 620CKRM and GX94 for new installments of Trade Dispute: Impact on the Prairies.
